REG - First Tin PLC - Final Audited Results
30/05/2022 07:15
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RNS Number : 1602N First Tin PLC 30 May 2022
30 May 2022
First Tin Plc
("First Tin" or "the Company")
Final Audited Results for the year ended 31 December 2021
First Tin, a tin development company with advanced, low capex projects in
both Germany and Australia, today publishes its final audited results for the
year ended 31 December 2021.
Highlights
· Activities undertaken during the period under review created the
platform for the Company's successful IPO on the Standard List of the London
Stock Exchange in April 2022 raising £20 million (before expenses) of new
equity capital which it intends to use to complete further resource drilling
and feasibility studies on both its core Tellerhäuser and Taronga assets.
· The material activities undertaken during the period under review
include:
Ø Significant strengthening of the Board and executive management team which
now benefits from over 150 years of combined experience in the exploration,
development, mining, and processing of tin.
Ø Conversion of all outstanding debt and completion of a £6m equity
placement leaving the Company debt free with significant available cash
resources for investment.
Ø The signing of a Sale and Purchase agreement to acquire the advanced staged
Taronga tin asset in Australia, a deal that was completed post period end
alongside the IPO.
Ø Successful application for a significant amount of new exploration ground
in Germany called the Auersberg license, which sits directly between the
Company's Tellerhäuser and Gottesberg assets, meaning that First Tin
currently holds a single contiguous land package of over 23,000 hectares in a
highly under-explored tin district in Saxony, Germany.
· The Company also completed CPRs on both its Tellerhäuser tin
asset in Germany and its Taronga tin asset in Australia, which included a
review of the underlying economic models of both mining projects and reported
attractive economic returns assuming a price of US$30,000 per tonne of tin as
follows:
Ø Tellerhäuser's NPV US$265 million at 8% discount rate and IRR of 58%;
Ø Taronga's NPV US$169 million at 8% discount rate and IRR of 59%.
Thomas Buenger, Chief Executive Officer, commented:
"We are delighted to present our maiden set of preliminary results following
an exciting and busy period for the Company which culminated post period end
in our successful IPO, £20m fundraising and the acquisition of the advanced
Taronga tin asset in Australia.
"We enter life as a listed company with a portfolio of high value, low capex
tin assets located in Tier 1 jurisdictions with near term production and
exploration upside potential. Both assets are ideally located to deliver a
sustainable answer to the ongoing supply shortage currently facing many
industrial users of tin.
"Moving into 2022, we have made an encouraging start to the new financial year
and expect to provide regular updates to shareholders regarding the
exploration and development activities currently underway as we push both of
our core assets towards completion of their respective feasibility studies.
With a strong balance sheet and experienced management team, we are well
positioned to take advantage of the sizeable, rapidly growing tin market."
The Company's Annual General Meeting ("AGM") will be held at 16:00pm on
Thursday 30 June 2022 at 47/48 Piccadilly, London, W1J 0DT. The Annual Report
and AGM notice and proxy will be posted to shareholders today and are
available to view on the First Tin website, https://firsttin.com/
(https://firsttin.com/) . Both documents will be available shortly on the
FCA's National Storage Mechanism,
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Enquiries:
First Tin Via SEC Newgate below
Thomas Bunger - Chief Executive Officer
Arlington Group Asset Management Limited (Financial Advisor and Joint Broker)
Simon Catt 020 7389 5016
WH Ireland Limited (Joint Broker)
Harry Ansell 020 7220 1670
SEC Newgate (Financial PR)
Elisabeth Cowell / Molly Gretton 07900 248 213
Notes to Editors
First Tin is an ethical, reliable, and sustainable tin production company led
by a team of renowned tin specialists. The Company is focused on becoming a
tin supplier in conflict-free, low political risk jurisdictions through the
rapid development of high value, low capex tin assets in Germany and
Australia.
Tin is a critical metal, vital in any plan to decarbonise and electrify the
world, yet Europe has very little supply. Rising demand, together with
shortages, is expected to lead tin to experience sustained deficit markets for
the foreseeable future. Its assets have been de-risked significantly, with
extensive work undertaken to date.
First Tin's goal is to use best-in-class environmental standards to bring two
tin mines into production in three years, providing provenance of supply to
support the current global clean energy and technological revolutions.
Chairman's Statement
I am delighted to report the first full year results of First Tin Plc (the
"Company" or "First Tin") and its subsidiary undertakings (the "Group") since
the Company's admission to the Main Market of the London Stock Exchange
("LSE") on 8 April 2022. The period under review was focused on putting the
necessary building blocks in place to provide a solid foundation for the
Group's future growth.
In this regard, the Company successfully closed a £6m equity financing in
April 2021 which allowed it to invest further into its German tin
operations. At its core Tellerhäuser asset, an optimisation study was
completed by Bara Consulting Ltd which both highlighted the financial
robustness of the asset but also provided a new, streamlined development path
to production. At its Gottesberg asset, the Group started a drill program to
target both shallow resources within the existing resource as well as target
areas outside the known deposit where there is evidence of historical mining
activities. The Group also successfully applied for a significant amount of
new exploration ground sitting directly between Tellerhäuser and Gottesberg,
called the Auersberg license, meaning that First Tin currently holds a single
contiguous land package of over 23,000 hectares in what we believe to be a
highly under-explored tin district in Saxony, Germany.
Furthermore, during the period under review, the Company initiated plans to
list on the Main Market of the LSE and also signed a Sale and Purchase
agreement with ASX listed Aus Tin Mining Limited ("Aus Tin") to acquire 100%
of their Australian tin asset called Taronga. The acquisition was contingent
on a minimum £20m equity fundraising and a successful IPO and I am delighted
to be able to report that both these conditions were completed post period end
meaning that First Tin now holds mature, tin assets located in the low-risk,
conflict-free jurisdictions of Germany and Australia. Both Tellerhäuser and
Taronga benefit from good infrastructure, with established reserves, granted
mining licenses, and have simple mineralogy creating a quick path to
production. In aggregate, the Company's two core assets represent the 5th
largest undeveloped tin reserve globally, outside Russia, Kazakhstan, and the
Democratic Republic of Congo.
During the period, First Tin also refreshed the Board, appointing Thomas
Buenger as Chief Executive Officer while I joined the Board as Chairman.
Thomas has all of the required experience to develop and manage First Tin's
tin portfolio as a result of his many years of working as Chief Operating
Officer and Chief Technical Officer of Aurubis AG, Germany's largest copper
and tin producer. Thomas is also backed up by a seasoned, executive team of
renowned global tin specialists with over 150 years of combined experience in
the exploration, development, mining, and processing of tin.
Following the activities undertaken during 2021, on which Thomas will provide
further detail in his Chief Executive Officer's Report, we are proud to
commence life as a publicly listed company in a cash-rich, debt-free position,
with quality assets in Tier 1 jurisdictions. To have been able to close a
£20 million equity fundraising in early April, in what were extremely adverse
macro-economic conditions reflects both the quality of our tin portfolio and
also the ever-growing demand for new environmentally sensitive sources of tin
production from Organisation for Economic Co-operation and Development
("OECD") countries.
The next year will be an incredibly busy time for First Tin as we develop our
German and Australian tin assets towards production, and we look forward to
updating all shareholders with positive news flow as we begin our life on the
Main Market.
Mr C Cannon Brookes
Non-executive Chairman
Chief Executive's Statement
Introduction
This has been a very busy period for the Company, primarily focused on getting
First Tin ready to become a publicly listed company that can successfully
develop its high value, low capex German and Australian tin assets. I am
delighted to have joined First Tin at such an exciting time for the Company.
Having previously worked as Chief Operating Officer and Chief Technical
Officer and on the Board at Aurubis AG, Germany's largest copper and tin
producer, for 16 years, I have gained considerable experience and knowledge of
tin mining and development. I look forward to applying this to our advanced
and scalable portfolio of assets, to drive the business towards a prosperous
future. I would like to thank the former Board members for all their hard work
and determination in creating the foundations for what we are today.
The period under review saw us undertake a thorough refinancing of the
business including converting the Baker Steel Resources Trust Limited ("Baker
Steel") convertible loan note, the completion of a £6 million equity funding
round, and the disposal of the Company's equity investment in Panthera
Resources, all of which enabled the Group to become a cash-rich, debt-free
business, poised for future growth.
This financing enabled us to undertake activities to build value within our
portfolio. In our German assets, we undertook a Competent Persons Report
("CPR") and optimisation study at Tellerhäuser, commenced exploration
drilling at Gottesberg, and successfully secured a new exploration licence
which has enabled us to secure a large, strategic land package in a highly
prospective, Tier 1 jurisdiction. In conjunction, we completed milestones
towards the purchase of our late stage Taronga tin project in Australia, a
deal which was completed post period end.
First Tin's German and Australian tin assets are ideally located to deliver
sustainable and conflict-free tin production in the future, and we are
committed to best-in-class environmental responsibility with a 'leave no
trace' philosophy including using low carbon and low waste production methods.
Our aim is become a leading global tin producer that will supply fully
traceable and verifiable tin units into fast-growth global industries which
have a high requirement for tin.
Tellerhäuser - Germany
Our Tellerhäuser project forms part of the Rittersgrün license and is one of
the world's most advanced tin deposits with an exceptionally long history of
mining and an active Mining Licence already in place until 30 June 2070 for
the extraction of mineral resources.
Located within a tin district in Saxony, this asset is a former East German
mine with good conditions underground and major existing infrastructure
benefits which ensures future development capital cost will remain low. For
example, Tellerhäuser benefits from an existing 180,000m of underground
development, 500m of internal shafts, a 7.8km main adit, and over 141km of
drilling in 2,112 drill holes.
During the period, we undertook economic analysis to Scoping Study level,
which showed the Tellerhäuser project is financially robust. The project's
proximity to infrastructure means that it has a very low projected start-up
capital expenditure of US$49 million, which, at US$30,000 per tonne of tin,
suggests a net present value ("NPV") of US$264 million (using 8% discount
rate) and an internal rate of return ("IRR") of 58%. This is based on a
production rate of 500,000 tonnes per annum over the life of the mine.
In addition to the Mining Licence, First Tin also holds two Exploration
Licences ("EL") in Germany. The "Gottesberg" EL was secured in 2019, while an
EL for the "Auersberg" field, which connects the licences of Rittersgrün and
Gottesberg, was successfully secured during the period.
First Tin intends to continue active drilling programmes at each of its German
project areas.
At the Tellerhäuser project, we will undertake both surface and underground
diamond drilling targeting both existing, and potential extensions to the
known mineralisation. At Gottesberg, whose drill program commenced in Q4 2021,
surface diamond drill holes will be completed to target shallower parts of the
existing resource but also to explore areas outside the known deposit where
there is evidence of historical mining activities. The Auersberg EL will
also be drilled around various historical tin workings and will be targeting
vein style greisens which were historically mined to a maximum depth of
approximately 50m due to water ingress.
Taronga - Australia
Our Taronga asset, which we acquired alongside our successful IPO last month,
is also an asset which has had over one century of development, including
extensive drilling, tunnelling, and mining.
Like with Tellerhäuser, Taronga is surrounded by excellent existing
infrastructure and abundant underexplored tin showings, providing major
exploration upside potential. Significant exploration work was undertaken by
BHP in 1933, 1958, and 1964, and by the Newmont Joint Venture from 1979 to
1982. Between 2012 and 2018, the former owners of Taronga completed a Mineral
Resource and Ore Reserve estimates as well as completing a pre-feasibility
study ("PFS") on the asset and were granted a mining lease over part of the
deposit.
Based on a mine production schedule that called for a total production of 23.2
million tonnes at 0.16% Sn, the PFS showed robust economics, at US$30,000 per
tonne of tin, with an NPV (at 8% discount) of US$169 million and an IRR of
59%. Like with Tellerhäuser, the PFS also envisaged a low start-up capex
figure of only US$76 million.
A rapidly growing market
Global demand for tin is currently strong with tin prices hovering near
ten-year highs on the back of the accelerating use for tin as a solder in
electronics and in electromobility products. The International Tin Association
("ITA") forecasts demand to grow from 355kt in 2020 to over 400kt in 2025 and
that, even if the sharp demand growth seen in 2020-21 reduces, demand will
still outstrip supply until at least 2025.
Supply is currently constrained following production disruptions in Myanmar
and other leading production countries, as well as export restrictions imposed
by the Indonesian government. In 2021, the combination of strong demand with
constrained supply resulted in a critically low global tin inventory with
London Metal Exchange inventories reaching c.30-year lows. We believe that the
supply-demand dynamics of the tin market will remain compelling for many years
to come.
Furthermore, as consumers increasingly opt for traceable, conflict-free and
Environmental, Social and Governance ("ESG") compliant sources of tin, an
opportunity exists for responsible mining companies such as First Tin whose
operations and assets are located within OECD member countries to take
advantage of the rapidly growing market.
ESG
First Tin is supporting a decarbonised future and is committed to
best-in-class environmental responsibility. The impacts of climate change are
increasingly being felt around the world and First Tin is committed to being a
zero-carbon emissions company as agreed to by nations participating in the
Paris Agreement of 2015. As we progress towards production in the next three
years, it is important to note that First Tin's operations will be designed to
be as low-waste and low carbon as possible.
The Group applies stringent environmental controls and procedures to minimise
and mitigate its impact on land, water, air quality, climate, and biodiversity
and complies with the requirements of all applicable legislation, regulation,
and rules. In that regard, First Tin has formed an internal ESG committee
which will ensure that the Company is meeting its ESG key performance
indicators ("KPIs") and the Group is also undertaking a third party
independent ESG audit to provide an independent assessment of its operations
and development plans.
IPO and near-term activities
After the year end, the Company's successful IPO and admission to trading on
the Main Market of the LSE was a significant milestone in our history, raising
£20 million of new funds to support the Group's growth strategy and we are
delighted to welcome our new shareholders, both institutional and retail, to
the register. We will use the net proceeds of the fundraise to execute the
necessary steps to obtain the operational permits for both the Taronga and
Tellerhäuser projects, as well as to conclude definitive feasibility studies
("DFS") for both projects. As part of this DFS work, further drilling
programmes will be completed both to further prove up existing tin resources
but also to undertake exploration drilling on new exploration targets of the
Group.
Outlook
Looking forward, First Tin will continue to rapidly develop both its German
and Australian tin assets, with the aim to create shareholder value while also
delivering a sustainable answer to the ongoing supply shortage currently
facing many industrial users of tin.
With a strong balance sheet and experienced management team comprising of
renowned tin specialists, the Group is well positioned to take advantage of
the sizeable, rapidly growing tin market. As a result, the Board looks
forward to the future with great confidence.
Mr T Buenger
Chief Executive Officer
Strategic Report
Principal activity
The Company owns two advanced tin projects, one in Germany and one in
Australia, and is seeking to bring both projects into production in order to
be able to deliver a sustainable answer to the material supply issues faced by
industrial tin consumers.
The Company's aim is to become a global tin producer supplying fully traceable
and verifiable tin units into global industries with high tin usage needs.
Review of the business
A review of the business is set out in the Chief Executive Officer's report.
Financial review
The Group reported a loss after tax of £1,212,677 (2020: £682,289) and a net
asset value of £7,569,316 (2020: £1,552,297) for the year ending December 31
2021.
The Group completed the following material financial transactions during the
year:
· In April 2021, 27,691,781 Ordinary Shares were issued at 8p
each to Baker Steel as part of the conversion of their outstanding £2,200,000
convertible loan notes, realising an overall gain of £167,795 for the year.
Post conversion the Group was in a debt free position;
· In April 2021, 40,000,000 Ordinary Shares were issued at 15p
each to complete a £6,000,000 equity funding round;
· In June 2021, the Company sold its AIM listed equity investment
in Panthera Resources Plc for £333,000 cash, realising an overall loss of
£582,750 for the year;
· In November 2021, the Company entered into an agreement with
Aus Tin Mining Limited ("Aus Tin") to acquire its wholly owned subsidiary,
Taronga Mines Pty Ltd ("Taronga") and its tin mining licences on a debt-free
cash-free basis, paying an initial cash consideration of £734,182
(AUD$1,350,000) with a subsequent issue of 60,000,000 ordinary shares in the
Company. The acquisition completed after the Company's year end on 8 April
2022 at the same time as the Company's IPO on the Standard List of the London
Stock Exchange ("LSE"); and
· During November and December 2021, prior to the closing of the
Taronga acquisition, the Company advanced £813,762 (AUD$1,505,000) to Taronga
as an unsecured interest free loan to provide working capital to fund a
strategic land acquisition which will assist the efficient future development
of the Taronga asset.
During the year, the Group also completed CPRs on both its Tellerhäuser tin
asset in Germany and its Taronga tin asset in Australia which included a
review of the underlying economic models of both mining projects and reported
satisfactory economic returns, assuming a price of US$30,000 per tonne of tin,
as follows:
· Tellerhäuser's NPV US$265 million at 8% discount rate and IRR
of 58%;
· Taronga's NPV US$169 million at 8% discount rate and IRR of
59%.
At the year end, the Group had considerably improved its balance sheet
position:
· Overall net assets increased by £6,017,019 to £7,569,316
(2020: £1,552,297);
· Cash reserves increased by £2,257,974 to £2,503,714 (2020:
£245,740); and
· Current liabilities decreased by £2,364,748 to £301,452
(2020: £2,666,200).
Financial review (continued)
The Group completed its IPO on the Standard List of the LSE in April 2022
raising £20 million (before expenses) of new equity capital which it intends
to use to complete further resource drilling and feasibility studies on both
its Tellerhäuser and Taronga assets. These studies will provide the basis to
secure additional funding and to accelerate a path to mining production on
both projects.
For the year under review, the Group's financial objectives under its key
performance indicators were to secure additional funding, reduce debt, divest
of non-core assets, improve its balance sheet and secure the further
acquisition of another core asset as outlined above in preparation for the IPO
in 2022.
Principal risks and uncertainties
The Directors consider the following to be the key risks and uncertainties
applicable to the Group's activities:
Dependence on two projects
At the date of the Company's admission to the London Stock Exchange the
Company owns two projects. The Company's success will be dependent on those
two projects and issues at one project may adversely affect the other and, in
turn, the Company.
Licences and permissions
The ability of the Group to progress its projects is highly dependent on it
maintaining existing licences, successfully applying for extensions to such
licences and acquiring future necessary licences and permissions. In the
event that the Company does not do so its results of operations will be
materially adversely affected.
On 16 September 2020, Saxony Minerals and Exploration AG ("SME") filed an
objection with the Saxon Mining Office (being the awarding body in Saxony for
mining licences) against a notice dated 13 August 2020 pursuant to which the
Company's subsidiary in Germany, Saxore Bergbau GmbH ("Saxore"), was granted a
permit by the Saxon Mining Office for the exploration and mining over the
"Rittersgrün" field which contains the Tellerhäuser project. On 26 January
2021, the Saxon Mining Office ordered the immediate enforcement of the permit
awarded to Saxore. SME applied to the Chemnitz Administrative Court on 12
April 2021 for a ruling that its September 2020 objection would suspend the
permit but this was rejected by the Court on 12 July 2021 with the Court
noting that it considered the permit to be lawfully granted and that the
objection was unfounded.
SME filed an appeal on 22 July 2021 with the Saxon Higher Administrative Court
but this was rejected on 22 March 2022. In its decision, the Saxon Higher
Administrative Court noted that the appeal was unfounded, that the immediate
enforcement of the "Rittersgrün" permit was lawful and that the granting of
the "Rittersgrün" permit to Saxore did not violate any rights of SME. The
decision of the Saxon Higher Administrative Court on the immediate enforcement
of the permit is final, and no further appeal by SME is possible against this
decision. Neither Saxore nor the Company were directly party to such
proceedings and the two Court decisions, confirming that the immediate
enforcement of the "Rittersgrün" permit (mining licence) was lawful, is a
strong sign that the Courts regard the granting of the permit itself as lawful
and the objection of SME as unfounded.
Requirement for further capital
Whilst the Company has sufficient working capital for its plans in the
short-medium term, to bring both of its projects into production, it will need
to raise additional capital. Such capital could be by way of equity
financing, which will dilute existing shareholders or by way of debt funding
which could see the Company subject to various banking covenants.
Commodity prices
The Company's future value and its potential future revenues will be highly
dependent on global tin prices. Although tin is, as at the date of these
financial statements, at record highs, there can be no guarantee that the tin
price will remain at such price levels. A depressed tin price will adversely
affect the Company's revenues.
Nature of mineral exploration and development
Mineral exploration and development can be highly speculative in nature and
involve a high degree of risk. The economics of developing mineral
properties are affected by many factors including the cost of operations,
variations of the grade of ore mined, fluctuations in the price of minerals,
costs of development, infrastructure and processing equipment and such other
factors as government regulations, including regulations to royalties,
allowable production, importing and exporting of minerals and environmental
protection.
Litigation risk
The Company may face litigation from third parties aimed at delaying or
stopping the Company's operations or could potentially be impact by a third
party attempting to litigate against a licensing authority. Such litigation
could be brought by environmental pressure groups or competitors and could
result in the Company having to spend management time and cash on dealing with
such proceedings.
Mining industry risks and hazards
The Company's operations will be subject to typical hazards and risks present
in exploiting natural resources. This includes accidents, industrial
disputes and litigation from third parties. Any such events could materially
impact the Company's financial condition.
Foreign exchange risk
The Company will be exposed to foreign exchange risk as it is domiciled in the
UK but with operations in Germany and Australia, and, in addition as tin is
priced in US Dollars. There can be no guarantee that exchange rates between
the Pound, Euro, Australian Dollar and US Dollar will not become more volatile
in the future.
Environmental, social and governance considerations
First Tin is committed to the environmentally sensitive development of
advanced hard rock tin projects in conflict free, low political risk
jurisdictions. The Company's goal is to develop and operate zero carbon
sustainable tin mines that support the current global clean energy and
technological revolutions.
First Tin is also supporting a decarbonised future and is committed to
best-in-class environmental responsibility. The impacts of climate change
are increasingly being felt around the world and First Tin is committed to
being a zero-carbon emissions company as agreed to by nations participating in
the Paris Agreement of 2015. The Company applies stringent environmental
controls and procedures to minimise and mitigate its impact on land, water,
air quality, climate and biodiversity and complies with the requirements of
all applicable legislation, regulation and rules. First Tin is currently in
the process of undertaking a third party independent ESG audit assessment and
is a qualified candidate for European Raw Material Alliance funding and
support.
Events after the reporting date
On 9 March 2022 the Company's wholly-owned subsidiary, First Tin Australia Pty
Ltd, was incorporated in Australia.
On 8 April 2022 the Company's shares were admitted to the Official List (by
way of a Standard Listing under Chapter 14 of the Listing Rules) and to
trading on the Main Market of the London Stock Exchange. This follows a
subscription, institutional placing and retail offer which raised in aggregate
£20 million (before expenses) at a placing price of 30 pence per share.
Also on 8 April 2022, the Company issued 60,000,000 shares to Aus Tin to
complete the acquisition of Taronga.
This report was approved by the board on 27 May 2022 and signed on its behalf:
Mr C Cannon Brookes
Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes 2021 2020
£ £
Administrative expenses (1,321,977) (589,002)
Operating loss 6 (1,321,977) (589,002)
Other gains and losses 8 167,795 110,321
Finance costs 9 (58,495) (203,608)
Loss on ordinary activities before taxation (1,212,677) (682,289)
Income tax expense 10 - -
Loss after taxation (1,212,677) (682,289)
Other comprehensive income:
Exchange differences on translation of (117,093) 112,557
foreign operations
Changes in the fair value of equity instruments at fair value through other 16 (582,750) 749,250
comprehensive income
Total comprehensive (loss)/income for the year (1,912,520) 179,518
Loss per share
Basic (pence) 11 (1.02) (1.02)
Diluted (pence) 11 (1.02) (1.02)
The Statement of Comprehensive Income has been prepared on the basis that all
operations are continuing operations.
The notes below form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Notes 2021 2020
Assets £ £
Non-current assets
Intangible assets 13 3,380,913 2,950,227
Investments deposit and long-term receivables 14 1,543,670 -
Property, plant and equipment 15 28,851 10,930
Financial assets at fair value through other 16 - 915,750
comprehensive income
4,953,434 3,876,907
Current assets
Trade and other receivables 17 413,620 95,850
Cash and cash equivalents 2,503,714 245,740
2,917,334 341,590
Total assets 7,870,768 4,218,497
Liabilities
Current liabilities
Convertible loan notes 18 - (2,478,479)
Trade and other payables 19 (301,452) (187,721)
(301,452) (2,666,200)
Net current assets/(liabilities) 2,615,882 (2,324,610)
Total assets less current liabilities 7,569,316 1,552,297
Net assets 7,569,316 1,552,297
Equity
Called up share capital 22 138,868 70,177
Share premium account 22 17,931,296 10,264,409
Share to be issued 23 - 50,411
Warrant reserve 24 95,372 -
Retained earnings 24 (10,507,856) (8,861,429)
Translation reserve 24 (88,364) 28,729
Total equity 7,569,316 1,552,297
The notes below form part of these financial statements.
The financial statements were approved and authorised for issue by the board
on 27 May 2022 and were signed on its behalf by:
Mr C Cannon Brookes
Director
Company number 07931518
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share premium
account
Share Shares to be issued Warrant Retained Translation reserve
capital
reserve
earnings
Total equity
£ £ £ £ £ £ £
At 1 January 2020 63,702 9,686,028 50,411 - (8,928,390) (83,828) 787,923
Comprehensive income:
Loss for the year - - - - (682,289) - (682,289)
Other comprehensive income - - - - 749,250 112,557 861,807
Total comprehensive income - - - - 66,961 112,557 179,518
Transactions with owners:
Accrued interest on convertible loan notes - - 200,548 - - - 200,548
Issuance of shares 6,475 578,381 (200,548) - - - 384,308
6,475 578,381 - - - - 584,856
At 1 January 2021 70,177 10,264,409 50,411 - (8,861,429) 28,729 1,552,297
Comprehensive income:
Loss for the year - - - - (1,212,677) - (1,212,677)
Other comprehensive income - - - - (582,750) (117,093) (699,843)
Total comprehensive income - - - - (1,795,427) (117,093) (1,912,520)
Transactions with owners:
Accrued interest on convertible loan notes - - 54,247 - - - 54,247
Issuance of shares 68,691 7,747,650 (104,658) - - - 7,711,683
Share based payments - (80,763) - 95,372 149,000 - 163,609
68,691 7,666,887 (50,411) 95,372 149,000 - 7,929,539
At 31 December 2021 138,868 17,931,296 - 95,372 (10,507,856) (88,364) 7,569,316
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Note 2021 2020
£ £
Cash flows from operating activities
Operating loss (1,321,977) (589,002)
Adjustments for:
Depreciation 8,845 9,575
Share based payment expense 163,609 -
Increase in trade and other receivables (317,770) (7,642)
Increase in trade and other payables 113,731 64,165
Cash used in operations (1,353,562) (522,904)
Interest paid (4,248) (3,060)
Net cash used in operating activities (1,357,810) (525,964)
Cash flows from investing activities
Purchase of intangible fixed assets (588,255) (286,779)
Purchase of property, plant and equipment (28,165) -
Initial consideration to acquire Taronga (734,182) -
Loan advanced to Taronga (813,762) -
Proceeds from sale of investment 333,000 100,000
Net cash used in investing activities (1,831,364) (186,779)
Cash flows from financing activities
Proceeds from issue of shares 5,601,000 384,308
Proceeds from issue of convertible loans - 200,000
Interest paid in respect of convertible loans (200,000) -
Net cash generated from financing activities 5,401,000 584,308
Net increase/(decrease) in cash and cash equivalents 2,211,826 (128,435)
Cash and cash equivalents at beginning of year 245,740 363,264
Currency translation 46,148 10,911
Cash and cash equivalents at the end of year 2,503,714 245,740
The notes below form part of these financial statements.
As disclosed in note 22, the material non-cash transactions relate to the
equity conversion of convertible loan notes and the issued of new shares to Mr
T Buenger.
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1 General Information
The Company is a public company limited by shares, incorporated in England and
Wales under the Companies Act 2006. The Company's registered address is First
Floor, 47/48 Piccadilly, London, England, W1J 0DT.
On 3 August 2021 the Company changed its name from Anglo Saxony Mining Limited
to First Tin Limited and on 15 March 2022 the Company re-registered as a
public company in the name of First Tin Plc.
The financial statements comprise of financial information of the Company and
its subsidiary (the "Group"). The principal activities of the Company and the
Group and the nature of their operations are disclosed elsewhere in these
financial statements.
2 Presentation of financial statements
The financial statements are presented in pounds sterling, as this is the
currency of the primary economic environment that the Group operates in.
3 Significant accounting policies
3.1 Basis of preparation
These financial statements have been prepared on the going concern basis in
accordance with International Financial Reporting Standards as adopted by the
UK and the requirements of the Companies Act 2006. The financial statements
have been prepared on a historical cost basis, except for certain financial
assets which are measured at fair value.
3.2 Going concern
The Group currently has no income and meets its working capital requirements
through raising development finance. In common with many businesses engaged in
exploration and evaluation activities prior to production and sale of minerals
the Group will require additional funds and/or funding facilities in order to
fully develop its business plan. Ultimately the viability of the Group is
dependent on future liquidity in the exploration period and this, in turn,
depends on the availability of funds.
During the year the Company raised net proceeds of £5.6 million from a
private placing of new shares. Subsequent to the year end, the Company's
shares were admitted to trading on the London Stock Exchange raising equity of
£20 million.
The Directors have prepared financial projections and plans for a period of at
least 12 months from the date of approval of these financial statements. Based
on the current management plan, management believes that these funds are
sufficient for the expenditure to date as well as the planned forecast
expenditure for the forthcoming twelve months.
The Directors have a reasonable expectation that the Group and the Company
have adequate resources to continue in operational existence for the
foreseeable future. For this reason, the Directors consider it appropriate for
the Group and the Company to adopt the going concern basis in preparing these
financial statements.
3 Significant accounting policies (continued)
3.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has power over the investee, is exposed or has
rights to variable returns from its involvement with the investee and has the
ability to use its power to affect its returns.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions.
The results of subsidiaries acquired or disposed of are included in the
consolidated Statement of Comprehensive Income from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation.
3.4 Intangible assets other than goodwill
Exploration and evaluation assets
The Group capitalises costs which directly relate to exploration and
evaluation activities in areas for which it has obtained appropriate legal
rights and there is a high degree of confidence in the feasibility of the
project.
Capitalised exploration and evaluation costs include acquisition of rights to
explore, topographical, geological, geochemical and geophysical studies,
exploration drilling, sampling and activities in relation to the evaluation of
the technical feasibility and commercial viability of extracting a mineral
resource. General and administrative costs directly associated with such
activities are also capitalised.
Exploration and evaluation costs are carried at cost less any impairment and
are not amortised prior to the conclusion of the appraisal activities. If the
appraisal activities establish the existence of commercial reserves and the
decision is made to develop the site, then the carrying value of the
associated exploration and evaluation assets is tested for impairment and
subsequently reclassified as development and production assets. If commercial
reserves have not been found, or exploration and evaluation activities have
been abandoned, then the associated exploration and evaluation assets are
fully impaired.
Impairment charges and exploration costs incurred prior to obtaining legal
rights are expensed in the profit and loss as incurred.
3.5 Property, plant and equipment
Items of property, plant and equipment that do not form part of the
exploration and evaluation assets are carried as cost less accumulated
depreciation and are depreciated on a straight-line basis over the following
expected useful economic lives:
Motor vehicles
3 years
Fixtures and fittings
3 - 15 years
Computer equipment
5 years
3 Significant accounting policies (continued)
3.6 Impairment of non-financial assets
At each reporting date, the Directors assess whether there is any indication
that a Group's asset, other than deferred tax assets, may be impaired. Where
an indicator of impairment exists, the Directors make an estimate of the
recoverable amount. An impairment loss is recognised in profit and loss
whenever the carrying amount of the asset or cash generating unit exceeds its
recoverable amount.
Recoverable amount is the higher of fair value less costs to sell and
"value-in-use". In assessing "value-in-use", the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time-value of money and the risks
specific to the asset for which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the profit and loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in the profit and
loss, unless the relevant asset is carried at a revalued amount greater than
cost, in which case the reversal of the impairment loss is treated as a
revaluation increase.
3.7 Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors.
3.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities.
3.9 Financial assets
Financial assets are recognised in the Statement of Financial Position when
the Group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification
depends on the Group's business model for managing the financial assets and
the contractual terms of the cash flows. Financial assets are initially
measured at fair value plus transaction costs, other than those classified as
"fair value through profit or loss" or "fair value through other comprehensive
income", which are measured at fair value.
3 Significant accounting policies (continued)
3.9 Financial assets (continued)
Loans and receivables
Trade receivables are recognised initially at the amount of consideration that
is unconditional, unless they contain significant financing components, in
which case they are recognised at fair value. They are subsequently measured
at amortised cost using the effective interest method less loss allowance.
Loans and other receivables that have fixed or determinable payments and are
held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are measured at amortised
cost using the effective interest method less any impairment.
Interest is recognised by applying the effective interest rate, except for
short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of
a debt instrument and of allocating the interest income over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the debt
instrument to the net carrying amount on initial recognition.
Financial assets at fair value through "other comprehensive income"
Financial assets at fair value through "other comprehensive income" comprise
of equity securities which are not held for trading, and which the Group has
irrevocably elected at initial recognition to recognise in this category.
Changes in the fair value of these assets are recognised in "other
comprehensive income".
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit loss
associated with its receivables carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, resulting in trade receivables recognised and
carried at original invoice amount less an allowance for any uncollectible
amounts based on expected credit losses.
The Group recognises a loss allowance for expected credit losses on
investments in debt instruments that are measured at amortised cost or at
"fair value through other comprehensive income". The amount of expected credit
losses is updated at each reporting date to reflect changes in credit risk
since initial recognition of the respective financial instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
3 Significant accounting policies (continued)
3.10 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair
value through profit or loss or other financial liabilities.
Other financial liabilities
Other financial liabilities, including trade and other payables, are initially
measured at fair value, and are subsequently measured at amortised cost, using
the effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
obligations are discharged, cancelled, or they expire.
3.11 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity instruments
are recognised as liabilities once they are no longer at the discretion of the
Company.
3.12 Derivative financial instruments
Derivatives are recognised initially at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value
at each reporting date. The resulting gain or loss is recognised in profit and
loss immediately unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the recognition in profit and
loss depends on the nature of the hedge relationship.
Embedded derivatives
An embedded derivative is a component of a hybrid contract that also includes
a non-derivative host - with the effect that some of the cash flows of the
combined instrument vary in a way similar to a standalone derivative. The
convertible loan is measured at amortised cost and the conversion option is
subsequently measured at fair value. The Group's policy is to offset the
financial asset and liability in relation to the single hybrid instrument and
show them on a single line.
3.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the profit and loss because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
3 Significant accounting policies (continued)
3.13 Taxation (continued)
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is realised.
Deferred tax is charged or credited in the profit and loss, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the Group has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
3.14 Foreign exchange
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The consolidated financial
statements are presented in pound sterling, which is the Group's functional
and presentation currency.
Transactions and balances
Transactions in currencies other than the functional currency are recorded at
the rates of exchange prevailing at the dates of the transactions. At each
reporting date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
date. Gains and losses arising on translation are included in profit or loss
for the period.
Group companies
For the purpose of presenting the consolidated financial statements, the
assets and liabilities of the Group's foreign operations are translated at
exchange rates prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for each period, unless exchange
rates fluctuate significantly during that period, in which case the exchange
rates at the date of transaction are used. All resulting exchange differences
are recognised in "other comprehensive income" and accumulated in equity.
3.15 Leases
The Directors assess whether a Group's contract is, or contains, a lease at
inception of the contract.
Payments associated with short-term leases or leases of low value assets are
recognised on a straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease-term of 12 months or less without a
purchase option.
3 Significant accounting policies (continued)
3.16 Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting
conditions. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 12 to these
financial statements.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Directors' estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Directors revises their estimate
of the number of equity instruments expected to vest as a result of the effect
of non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to reserves.
Equity-settled share-based payment transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods or the counterparty renders the service.
3.17 New and amended standards adopted by the Group
The Group has applied the following amendments for the first time for the
annual reporting period commencing 1 January 2021:
· Covid-19-Related Rent Concessions - amendments to IFRS 16; and
· Interest Rate Benchmark Reform - Phase 2 - amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
3.18 New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2021 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
4 Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS requires the
Directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities. Estimates and judgements are continually evaluated and are
based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Details of the Group's significant accounting judgements used in the
preparation of these financial statements include:
Recoverability of intangible exploration and evaluation assets
Where a project is sufficiently advanced, the recoverability of intangible
exploration and evaluation assets is assessed by comparing the carrying value
to internal and operator estimates of the net present value of projects.
Intangible exploration assets are inherently judgemental to value. The amounts
for intangible exploration and evaluation assets represent active exploration
projects. These amounts will be written-off to the profit and loss as
exploration costs unless commercial reserves are established, or the
determination process is completed and there are no indications of impairment.
5 Segmental analysis
In the opinion of the Board of Directors the Group has one operating segment,
being the exploitation of mineral rights.
Non-current assets by region are summarised below:
2021 2020
£ £
Germany 3,409,764 3,876,907
Australia 1,543,670 -
4,953,434 3,876,907
6 Operating loss
The operating loss for the year is stated after charging the
following:
2021 2020
£ £
Depreciation 8,845 9,575
Expenses relating to short-term leases 44,586 36,398
Auditor's remuneration:
Fees payable to the Company's auditor for the audit of the Company and 35,000 -
consolidated financial statements
Fees payable to the Company's auditor for other services: 130,800 -
Other transaction work
Less: amounts reclassified as prepayments (130,800) -
35,000 -
7 Staff costs and Directors' remuneration
2021 2020
£ £
Wages and salaries 309,857 171,415
Social security costs 52,298 11,015
Total staff cost 362,155 182,430
Less: amount capitalised as intangible asset (117,548) (82,147)
Total staff cost recognised in the profit and loss 244,607 100,283
The average number of staff employed by the Group, including Directors, is
detailed below:
2021 2020
No. No.
Management and administration 3 3
Geology and environment 3 3
6 6
Directors' remuneration and fees are disclosed in note 21.
The Directors are regarded as the key management personnel.
8 Other gains and losses
2021 2020
£ £
Gain on fair value of conversion option (167,795) (60,462)
Profit on disposal of subsidiary - (49,859)
(167,795) (110,321)
9 Finance costs
2021 2020
£ £
Interest on convertible loan notes 54,247 200,548
Bank charges and other finance costs 4,248 3,060
58,495 203,608
10 Income tax expense
2021 2020
£ £
Current tax - -
Deferred tax - -
- -
2021 2020
£ £
Loss before taxation on continued operations (1,212,677) (682,289)
Loss on before taxation multiplied by standard rate of UK corporation tax of (230,409) (129,635)
19% (2020 - 19%)
Difference in overseas tax rate (61,154) (45,824)
Expenses not deductible for tax 31,519 16,605
Income and gains not subject to tax - (9,473)
Effect of tax losses not recognised as deferred tax assets 260,044 168,327
Total tax charge for the year - -
The Group has tax losses carried forward of approximately £7.4 million (2020:
£5.9 million). The unutilised tax losses have not been recognised as a
deferred tax asset due to uncertainty over the timing of future profits and
gains.
11 Loss per Ordinary Share
2021 2020
Loss for the year attributable to the ordinary equity (1,212,677) (682,289)
holders of the Company (£)
Basic:
Weighted average number of Ordinary Shares issued (No.) 118,813,650 66,291,393
Adjustment for accrued shares to be issued for interest on convertible loan - 727,199
notes (note 17) (No.)
Total weighted average number of Ordinary Shares issued used in basic and 118,813,650 67,018,593
diluted loss per Ordinary Share calculation (No.)
Basic loss per Ordinary Share (1.02) (1.02)
Diluted:
Weighted average number of Ordinary Shares issued (No.) 122,593,003 66,291,393
Adjustment for accrued shares to be issued for interest on convertible loan - 727,199
notes (note 17) (No.)
Total weighted average number of Ordinary Shares issued used in basic and 122,593,003 67,018,593
diluted loss per Ordinary Share calculation (No.)
Diluted loss per Ordinary Share (1.02) (1.02)
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all potential dilutive warrants,
options and convertible loans over ordinary shares. Potential ordinary
shares resulting from the exercise of warrants, options and the conversion of
convertible loans have an anti-dilutive effect due to the Group being in a
loss position. As a result, diluted loss per share is disclosed as the same
value as basic loss per share.
12 Share based payments
Share options
On 4 March 2019, the Company issued 2,725,000 share options to key personnel
within the Company. The options vest 7 business days after the grant date,
have an exercise price of 13p and, if they remain unexercised after 4 years,
they expire. If the employees leave the Company, the options expire 90 days
after their leaving date:
2021 2020
No. of options No. of options
Outstanding at beginning of year 2,210,000 2,275,000
Expired during the period (650,000) (65,000)
Outstanding at the end of the year 1,560,000 2,210,000
Exercisable at the end of the year 1,560,000 2,210,000
The options outstanding at 31 December 2021 had a weighted average exercise
price of 13p (2020: 13p) and a weighted average remaining contractual life of
1.67 years (2020: 2.17 years). During the year ended 31 December 2021, 650,000
options expired due to an employee leaving the Company (2020: 65,000). No
options were exercised (2020: nil) and no further options were granted (2020:
nil).
Share warrants
2021 2020
No. of warrants No. of warrants
Outstanding at beginning of year 2,407,048 2,407,048
Granted during the period 3,168,000 -
Lapsed during the period (2,407,048) -
Outstanding at the end of the year 3,168,000 2,407,048
Exercisable at the end of the year 3,168,000 2,407,048
The warrants outstanding at 31 December 2021 had a weighted average exercise
price of 20p (2020: 20p) and a weighted average remaining contractual life of
2.78 years (2020: 0.32 years). During the year ended 31 December 2021, no
warrants were exercised (2020: nil), 2,407,048 warrants expired (2020: nil)
and 3,168,000 warrant were granted (2020: nil).
Impact on the statement of comprehensive income
Share options
The Group did not recognise a charge in profit or loss for the year ended 31
December 2021 (2020: £nil).
Share warrants
The Group recognised a charge of £14,609 in profit or loss for the year ended
31 December 2021 (2020: £nil). A charge of £80,763 (2020: £nil) was
recognised in the share premium account for the warrants issued in return for
the broker services in connection with a capital raise.
Shares issued
The Group recognised a charge of £149,000 in profit or loss for the year
ended 31 December 2021 (2020: £nil) in respect of shares issued to Mr T
Buenger as part of his Chief Executive Officer contract.
13 Intangible assets
Exploration and evaluation assets
£
Cost
At 1 January 2020 2,602,707
Additions 286,779
Disposals (50,000)
Currency translation 110,741
At 31 December 2020 2,950,227
Additions 588,255
Currency translation (157,569)
As at 31 December 2021 3,380,913
The intangible assets relate to the Tellerhäuser and Gottesberg tin projects
located in southern Saxony in the east of Germany.
The Directors assess for impairment when facts and circumstances suggest that
the carrying amount of an E&E asset may exceed its recoverable amount. In
making this assessment, the Directors have regard to the facts and
circumstances noted in IFRS 6 paragraph 20. In performing their assessment of
each of these factors, at 31 December 2021, the Directors have:
a) reviewed the time period that the Group has the right to explore
the area and noted no instances of expiration, or licences that are expected
to expire in the near future and not be renewed;
b) determined that further E&E expenditure is either budgeted or
planned for all licences;
c) not decided to discontinue exploration activity due to there being
a lack of quantifiable mineral resource; and
d) not identified any instances where sufficient data exists to indicate
that there are licences where the E&E spend is unlikely to be recovered
from successful development or sale.
On the basis of the above assessment, the Directors are not aware of any facts
or circumstances that would suggest the carrying amount of the E&E asset
may exceed its recoverable amount.
14 Investments deposit and long-term receivables
Investment deposit Long-term receivables Total
£ £ £
Cost
At 1 January 2021 - - -
Additions 734,182 813,762 1,547,944
Currency translation - (4,274) (4,274)
At 31 December 2021 734,182 809,488 1,543,670
In November 2021, the Company entered into a Sale and Purchase Agreement with
Aus Tin, the parent entity of Taronga, to acquire the entire share capital of
Taronga for an initial cash consideration of £734,182 (AUD$1,350,000)
followed by the issue of 60,000,000 ordinary shares of the Company on
completion. The acquisition is subject to a number of conditions including the
Company's share capital being admitted to trading on the main market of the
London Stock Exchange and completing a capital raising of £20 million by no
later than 30 June 2022. The Company also provided an unsecured, interest free
loan to Taronga to the value of £813,762 (AUD$1,505,000) as working capital.
The acquisition was completed on 8 April 2022 as disclosed further in note 25.
No provision for impairment was recognised as at 31 December 2021 or 2020.
The table below sets out the Company's subsidiaries. The subsidiaries have
share capital consisting solely of ordinary shares and the proportion of
ownership interests held equals the voting rights. The registered office
address is also their principal place of business:
Name of company Place of operation Principal activity Shareholding
Saxore Bergbau GmbH ("Saxore") Platz der Oktoberopfer 1A Mineral exploration 100%
(incorporated in Germany) 09599 Freiberg
Germany
In January 2020, the Company disposed of one of its subsidiaries, Godophin
Mining (UK) Limited (formerly Anglo Saxony Minerals (UK) Limited) for cash
consideration of £100,000. The carrying amount of the net assets disposed was
£50,141, consisting primarily of an exploration and evaluation intangible
asset with carrying value of £50,000, and thus a profit on disposal of
£49,859 was recognised in other gains and losses in profit or loss. In the
event that the former subsidiary achieves certain performance criteria,
additional cash consideration of US$1,000,000 will be receivable. At the date
of sale and as at 31 December 2021, the fair value of the additional
consideration was £nil due to its low probability.
15 Property, plant and equipment
Motor vehicles Fixtures and fittings Total
£ £ £
Cost
At 1 January 2020 and 31 December 2020 15,550 41,957 57,507
Additions 24,842 3,323 28,165
Currency translation (1,589) (7,483) (9,072)
At 31 December 2021 38,803 37,797 76,600
Accumulated depreciation
At 1 January 2020 8,650 29,374 38,024
Charge for the year 5,209 4,366 9,575
Currency translation (341) (681) (1,022)
At 31 December 2020 13,518 33,059 46,577
Charge for the year 4,811 4,034 8,845
Currency translation (762) (6,911) (7,673)
At 31 December 2021 17,567 30,182 47,749
Net book value
At 31 December 2020 2,032 8,898 10,930
At 31 December 2021 21,236 7,615 28,851
16 Financial assets at fair value through other comprehensive income
2021 2020
£ £
Shares held in AIM listed company - 915,750
The Group's equity investment consists of a minority shareholding in Panthera
Resources Plc, a company listed on the AIM market of the London Stock
Exchange. The investment is carried at fair value, based on the quoted share
price at the reporting date. The equity investment was disposed of in June
2021, with the loss on disposal of £582,750 recognised in the other
comprehensive income.
17 Trade and other receivables
2021 2020
£ £
Trade receivables - 7,800
Prepayments and other receivables 311,549 11,425
Amounts due from related parties - 69,818
Recoverable value added taxes 102,071 6,807
413,620 95,850
18 Convertible loan note
2021 2020
£ £
Convertible loan note - 2,478,479
In 2018, the Group issued 5-year convertible loan note ("CLN") for
£1,000,000, being tranches 1-3 and in 2019 a further £1,000,000, being
tranche 4 was issued. In 2020, the Group issued a further £200,000 CLN, being
tranche 5 and repayable in 3 years. The notes carry an interest rate of 10%
per annum, payable in a fixed number of Ordinary Shares. On maturity, the CLN
are converted into Ordinary Shares at a fixed price, unless the Company
exercises its option to redeem the CLN at par in cash. There are further
conversion provisions in the event of an IPO or a change of control and the
noteholders have the option to convert the CLN into Ordinary Shares early.
The Company's conversion option to redeem the CLN in cash instead of Ordinary
Shares is a non-closely related embedded derivative so is accounted for
separately at "fair value through profit and loss" and the host contract is
initially measured at fair value and subsequently carried at amortised cost.
The Company's policy is to offset the financial asset and liability in
relation to the single hybrid instrument and show them in a single line in the
Statement of Financial Position.
The host contract is a financial liability, and the interest payments are in
fixed number of Ordinary Shares, and thus represent an equity instrument
recognised directly in equity in the "shares to be issued" reserve.
In April 2021, all notes were redeemed at a price of 8p with the Company
issuing 27,500,000 Ordinary Shares (par value of £0.001) to the noteholders.
The agreement included the settlement of interest to 30 September 2021, which
resulted in the Company issuing further 191,781 Ordinary Shares (par value
£0.001) at 8p, and a cash payment of £200,000 to be made to cover the
remaining balance.
The gain on fair value of the CLN of £167,795 is included within other gains
and losses in profit or loss.
The movement in the embedded derivative financial asset is shown below:
2021 2020
£ £
Opening balance (569,512) (439,727)
Fair value of option at inception - tranche 5 - (69,323)
Gain on fair value of option - tranches 1-3 (338,265) (5,667)
Gain on fair value of option - tranche 4 (340,178) (56,095)
(Gain)/loss on fair value of option - tranche 5 (103,512) 1,300
Convertible loan conversion 1,351,467 -
Closing balance - (569,512)
The movement in the debt host contract liability is shown below:
2021 2020
£ £
Opening balance 3,047,991 2,778,668
Cash subscription - tranche 5 - 200,000
Fair value of option at inception - tranche 5 - 69,323
Redemption (3,047,991) -
Closing balance - 3,047,991
The convertible loan note balance of £nil (2020: £3,047,991) is the net of
the financial asset and liability, shown in the tables above.
19 Trade and other payables
2021 2020
£ £
Trade payables 210,521 82,184
Accruals 79,449 86,445
Other payables 11,482 19,092
301,452 187,721
20 Financial instruments
The principal financial instruments used by the Group from which financial
instrument risk arises are as follows:
Financial assets
2021 2020
£ £
Fair value through the profit and loss account
Convertible loan option - 569,512
2021 2020
£ £
Measured at amortised cost
Cash and cash equivalents 2,503,714 245,740
Amount due from related parties - 69,818
Trade and other receivables 67,736 13,121
2,571,450 328,679
2021 2020
£ £
Fair value through other comprehensive income
Shares held in AIM listed company - 915,750
Fair value hierarchy
Some of the Groups financial assets are measured at fair value at the end of
each reporting period.
There were no transfers between fair value hierarchies during 2021 or 2020.
Quoted market prices - Level 1
Fair value is determined by reference to unadjusted quoted prices for
identical assets or liabilities in active markets where the quoted price is
readily available, and the price represents actual and regularly occurring
market transactions on an arm's length basis. An active market is one in which
transactions occur with sufficient volume and frequency to provide pricing
information on an ongoing basis.
The following financial assets are recognised in the financial statements at
fair value through other comprehensive income and are classified within the
level 1 category:
2021 2020
£ £
Financial assets at fair value through other comprehensive income
Shares held in AIM listed companies - 915,750
20. Financial instruments (continued)
Fair value hierarchy (continued)
Valuation technique using observable inputs - Level 2
Fair value is calculated using inputs other than quoted prices as described
for Level 1 but which are observable for the asset or liability, either
directly or indirectly.
Valuation technique using significant unobservable inputs - Level 3
Fair value of level 3 financial instruments incorporates significant inputs
for the asset or liability that are not based on observable market data
(unobservable inputs). Unobservable inputs are those not readily available in
an active market due to market illiquidity or complexity of the product. These
inputs are generally determined based on observable inputs of a similar
nature, historic observations on the level of the input or analytical
techniques.
The following financial asset are recognised in the financial statements at
FVTPL and are classified within the level 3 category:
2021 2020
£ £
Financial assets at fair value through profit and loss
Convertible loan option - 569,512
The movement includes the conversion of the convertible loan option into the
Company's share capital.
Financial liabilities
2021 2020
£ £
Liabilities measured at amortised cost
Convertible loan note - 3,047,991
Trade and other payables 301,451 187,721
301,451 3,235,712
All financial assets and liabilities are due within one year.
The main risks arising from the Group's activities are market risk, credit
risk and liquidity risk.
Market risk
Market risk is the risk that the fair value of future cash flows will
fluctuate because of changes in market price. This risk is primarily comprised
of interest risk and foreign currency risk. Interest rate risk is deemed
minimal due to the fixed element of interest on intercompany loans.
Foreign currency risk management
As highlighted earlier in these financial statements, the presentation
currency of the Group is pound sterling. The Group has foreign currency
denominated assets and liabilities. Exposures to exchange rate fluctuations
therefore arise. The Group pays for invoices denominated in a foreign currency
in the same currency as the invoice therefore suffers from a level of foreign
currency risk. The Group does not enter into any derivative financial
instruments to manage its exposure to foreign currency risk.
20. Financial instruments (continued)
Foreign currency risk management (continued)
The carrying amount of the Group's foreign currency denominated monetary
assets and monetary liabilities as at 31 December 2021 is as follows:
Australian dollars
2021 2020
£ £
Long-term receivables 809,488 -
As at 31 December 2021, if all foreign currencies in which the Group
transacts, had strengthened or weakened by 10% against pound sterling with all
other variables held constant, post-tax loss for the year would have
increased/(decreased) by:
Strengthened by 10% Weakened by 10%
increase in post-tax loss decrease in post-tax loss
£ £
2020 - -
2021 75,583 (89,932)
The rate of 10% is the sensitivity rate used when reporting foreign currency
risk internally to key management personnel and represents management's
assessment of the reasonable possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the year-end for a 10% change
in foreign currency rates. A positive number above indicates an increase in
loss (increase in profit) or other equity where the pound sterling strengthens
by 10% against the relevant currency. For a 10% weakening of the pound
sterling against the relevant currency, there would be an equal and opposite
impact on the profit or loss and other equity.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. Credit risk
arises principally from the Group's cash balances and other receivables.
The Group gives careful consideration to which organisations it uses for its
banking services in order to minimise credit risk. The Group considers the
banks and financial institutions have low credit risks. Therefore, the Group
is of the view that the loss allowance is immaterial and hence no provision is
required.
The concentration of the Group's credit risk is considered by counterparty,
geography and currency. The Group does not have any significant concentrations
of credit risk at the reporting date related to external third parties. The
Group is exposed to credit risk in relation to a loan to Taronga but, as this
became a wholly owned and controlled subsidiary subsequent to the year end,
the credit risk is deemed to be low.
As at 31 December 2021, the Group held no collateral as security against any
financial asset. No financial assets were past their due date and there were
no problems with the credit quality of any financial assets in the year. As a
result, there has been no impairment of financial assets during the year.
20. Financial instruments (continued)
Credit risk (continued)
The carrying amount of financial assets recorded in the financial statements,
net of any allowances for losses, represents the Group's maximum exposure to
credit risk without taking account of the value of any collateral obtained. An
allowance for impairment is made where there is an identified loss event
which, based on previous experience, is evidence of a reduction in the
recoverability of the cash flows. Management considers the above measures to
be sufficient to control the credit risk exposure.
The Group recognises a loss allowance for expected credit losses in debt
instruments at each reporting date. As at 31 December 2021 and 2020, no
impairment was recognised.
Liquidity risk
Liquidity risk is the risk that an entity may not be able to generate
sufficient cash resources to settle its obligations as they fall due. The
Directors monitor cash flow requirements regularly and adopt a prudent
liquidity risk management approach to ensure sufficient cash is available for
operational expenses.
The following tables detail the Group's remaining contractual maturity for its
financial liabilities with agreed repayment periods. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the Group can be required to pay.
2021 2020
£ £
Due within 1 month
Trade and other payables 301,452 187,721
Fair values
The Directors consider that the carrying amount of loans and receivables and
other financial liabilities approximates to their fair value because of the
short-term nature of such assets the effect of discounting is negligible.
21 Related party transactions
Directors' remuneration and fees
The table below sets out the Directors' remuneration and fees:
2021 Share based payments
Fees £ Total
£ £
Mr M E Thompson 12,000 - 12,000
Mr A J Truelove 52,640 - 52,640
Mr A M J Collette 12,000 - 12,000
Mr G D Stanley(1) 94,806 - 94,806
Mr S L Fabian 72,000 14,609 86,609
Mr C Cannon Brookes(2) 9,000 - 9,000
Mr T Buenger 96,564 149,000 245,564
349,010 163,609 512,619
(1) Includes £50,000 paid as compensation for loss of office.( )
(2) Fees relating to Mr C Cannon Brookes are paid to Arlington Group Asset
Management Limited.
2020 Share based payments
Fees £ Total
£ £
Mr M E Thompson 12,000 - 12,000
Mr A J Truelove 38,944 - 38,944
Mr A M J Collette 12,000 - 12,000
Mr G D Stanley 23,919 - 23,919
Mr S L Fabian 120,000 - 120,000
Mr C Cannon Brookes - - -
Mr T Buenger - - -
206,863 - 206,863
The following amounts were due to the Directors' in respect of Director's
fees:
2021 2020
£ £
Mr M E Thompson 6,000 4,500
Mr A J Truelove 4,885 -
Mr A M J Collette 6,000 3,000
Mr G D Stanley - 10,000
Mr S L Fabian 2,000 50,000
Mr C Cannon Brookes 1,000 -
Mr T Buenger - -
19,885 67,500
21 Related party transactions (continued)
Other fees and transactions
Mr C Cannon Brookes was a director of Arlington Group Asset Management Limited
("Arlington") for the reporting period. During the year, Arlington invoiced
and was paid £420,499 (2020: £nil) in respect of fund raising commissions
and expenses.
Mr M E Thompson and Mr S L Fabian were directors of Tungsten West Plc
("Tungsten") for the reporting period. During the year, Tungsten invoiced
and was paid £8,000 (2020: £6,000) in respect of shared office rental
charges.
Mr M E Thompson was a director of Treliver Minerals Trustees Limited
("Treliver") for the reporting period. During the year, Treliver repaid an
unsecured interest free loan of £69,818. At 31 December 2021 £nil (2020:
£69,818) was owed to the Group.
22 Share capital
Ordinary share capital 2021 2020
£ £
Issued and fully paid
138,868,305 (2020: 70,176,522) ordinary £0.001 shares 138,868 70,177
The shares have attached to them full voting, dividend and capital
distribution (including on winding up) rights; they do not confer any rights
of redemption.
In April 2021, 27,691,781 Ordinary Shares were issued at 8p each to Baker
Steel as part of the conversion of their outstanding £2,200,000 convertible
loan notes, as described in note 18.
During the year, a further 40,000,002 Ordinary Shares were issued at 15p each
to complete a gross proceeds of £6,000,000 equity funding round.
In October 2021, 1,000,000 Ordinary Shares were issued at par to Mr T Buenger
under the terms of his Chief Executive Officer contract.
Share premium account 2021 2020
£ £
Share premium account 17,931,296 10,264,409
23 Shares to be issued
2021
£
As at 31 December 2020 50,411
Interest accrued in the year (see note 18) 54,247
Shares issued for interest payment (104,658)
As at 31 December 2021 -
24 Reserves
The warrant reserve is used to hold the fair value of warrants issued but not
yet exercised.
The retained earnings reserve contains the accumulated losses of the Group.
The translation reserve is used to hold the accumulated gains and losses on
translation of overseas subsidiaries.
25 Events after the reporting period
In March 2022, as part of the re-registration to a public limited company, the
Company completed a capital reduction which reduced the share premium by
£17,931,296. This was offset against its retained deficit.
On 9 March 2022, the Company's wholly owned subsidiary First Tin Australia Pty
Ltd, was incorporated in Australia.
On 8 April 2022, the Company's shares were admitted to trading on the London
Stock Exchange raising equity of £20 million.
In November 2021, the Company entered into a Sale and Purchase Agreement with
Aus Tin, the parent entity of Taronga, to acquire the entire share capital of
Taronga for an initial cash consideration of £734,182 (AUD$1,350,000)
followed by the issue of 60,000,000 ordinary shares of the Company on
completion. The acquisition was completed on 8 April 2022 with the issue of
shares at a value of 30p per share.
At the time of authorising these financial statements, the Group was still in
the process of finalising the valuation of certain assets and liabilities
acquired in connection to the acquisition of Taronga. The finalisation of
these valuations will be reflected in the Company's next set of financial
statements for the year ended 31 December 2022.
26 Net debt reconciliation
The table below sets out an analysis of net debt and the movements in net debt
for each of the years presented:
Net debt 2021 2020
£ £
Cash and cash equivalents 2,503,714 245,740
Convertible loan note - (2,478,479)
Net debt 2,503,714 (2,232,739)
Cash and cash equivalents Convertible loan note
£ £
Total
£
Net debt as at 1 January 2020 363,264 (2,338,941) (1,975,677)
Cash flows (128,435) (200,000) (328,435)
Currency translation ( ) 10,911 - 10,911
Movement in fair value - 60,462 60,462
At 31 December 2020 245,740 (2,478,479) (2,232,739)
Cash flows 2,211,826 - 2,211,826
Currency translation 46,148 - 46,148
Movement in fair value - 781,955 781,955
Shares issued on redemption of loan - 1,696,524 1,696,524
At 31 December 2021 2,503,714 - 2,503,714
27 Ultimate controlling party
In the opinion of the Directors, there is no controlling party.
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